Wednesday, September 9, 2015

Waste and Fraud

We hear about the occasional over-billing in the medical system. Significant time is dedicated in the press to individuals who either perceived or convicted of gaming systems designed for delivery of medical care and disability. But on June 19, 2015 CNN reported the "largest Medicare fraud bust ever." 

That description is a little misleading. Actually, Medicare recently made a group of arrests "across the country" and the aggregate of all of these cases of fraud together amount to an incredible volume of misrepresentation. There were 243 people arrested, including 46 doctors and nurses. The allegations are that together these people billed Medicare for "$712 million worth of patient care that was never given or unnecessary." That is a volume approaching one billion dollars. 

CNN characterized "one of the most egregious cases" as a Miami "mental health facility" that "billed tens of millions of dollars for psychotherapy sessions based on treatment that was little more than moving patients to different locations." Another Florida provider is accused of billing for, and receiving payment for, "$1.6 million from Medicare for prescription drugs that were never purchased and never dispensed." 

There are also instances of a broader nature. Some people sold medical equipment to Medicare recipients. That is not a new concept, and there have been other instances involving Medicare reimbursement for equipment.  

Many of us have seen ads on television that promise medical devices "at no cost if you qualify." One of those advertisers, the Scooter Store, went out of business in 2013. According to CBS Medicare decided to revoke the Scooter Store's status as a Medicare provider. CBS reported that the Scooter Store ads "led to hundreds of millions of dollars in unnecessary spending by Medicare." Once that business was off the Medicare-approved list, it apparently could not stay in business.

In the spirit of the Scooter Store, the recent aggregation of "$712 million" includes allegations against a "Los Angeles doctor (who) is charged for allegedly billing $23 million for 1,000 power wheelchairs and home health services that were not medically necessary and often not provided." 

In the recent story, CNN reports that "four people are charged for mass-marketing a talking glucose monitor and sending devices to Medicare patients across the country who didn't need or request them." They are accused of billing for and receiving "more than $22 million dollars of the recently announced "$712 million" aggregate. 

There are also those in society who recruit other people to be involved in medical care schemes. In June, ABC News reported the arrest of a Tampa Chiropractor. Officials allege that this care provider "paid patients to come to his clinics . . . then filed bogus insurance claims."That alleged scheme also involved "runners," who were paid to refer patients to the chiropractic office. That is an interesting twist, you get paid to go for treatment?

In the most recent Medicare cases story, A similar allegation is made regarding misappropriation of identities. These "patient recruiters" visited places "like homeless shelters and soup kitchens" where they paid disadvantaged people for "their Medicare patient numbers" that could then be used to bill Medicare. Some of society's most vulnerable being targeted for profit?

Others are accused of more outright fraud where legitimate "Medicare patients' personal information" was purchased, and then used to "bill Medicare for bogus care." That sounds a great deal like simple identity theft to me.  

One of the most interesting quotes in the CNN article comes from FBI Director James Comey. He says that "in these cases, we followed the money and found criminals who were attracted to doctor's offices, clinics, hospitals and nursing homes in search of what they viewed as an ATM." They are not ATMs, they are people. There are many in society that need medical care and it is hard to see those important services stolen or wasted. 

They claims that in the last eight years, 2,300 people have been charged with falsely billing "the Medicare program for more than $7 billion." That is almost a billion dollars each year? The CNN article suggests that these most recent investigations result from efforts in two cities, and says that "the team has expanded from two cities to nine" recently. Some might suggest that the surface is only being scratched. 

One wonders what volume of fraud might be uncovered and prosecuted if similar efforts were made in the fifty largest U.S. cities. If the $7 billion was uncovered in two or even nine cities as implied, could five to ten times this volume be uncovered? How much fraud is in the Medicare system overall? If these practices and defalcations exist in Medicare, are we to believe that they do not likewise exist in Medicaid, workers' compensation and group health?

It is a troubling question. How much fraud and waste is out there in the delivery of medical services? 

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